Daily Technical Strategist

EURUSD: Nearer Term Downside Weakness Turns Focus To The Pair's LT Rising Trendline

Thu, Jul 24 2008, 07:13 GMT
by Mohammed Isah

FXTechstrategy


EURUSD: EUR followed through to the downside on its Tuesday losses breaking below its daily 200 ema to close at 1.5683 on Wednesday.The fact that momentum indicators and price action are pointing lower now suggest a trade towards its LT trendline currently residing at 1.5636 which within the vicinity of its .50 Ret (1.5302- 1.6037 rally) at 1.5647.This zone is envisaged to provide a strong support and turn the pair higher again but if a failure of there occurs lower prices could be seen towards the 1.5610 level, its July 07’08 low and probably lower. On the upside, recoveries are expected to encounter resistance at the 1.5714 level, representing its daily 50 ema initially followed by the 1.5842 level, its Jun 09’08 high. Closing and maintaining above the latter should open up risk towards the 1.5945 level, its July 22’08 high with subsequent upside gains targeting the 1.6018/37 zone, its April 22’08/YTD highs and then the 1.6182 level, its 1.272 Fib Ext.On the whole, EUR remains under pressure nearer term but should turn higher again on ending that decline as this is corrective taking into consideration its medium and longer term outlooks.

Support Comments
1.5647/36 .50 Ret (1.5302-1.6037 rally)/LT rising trendline
1.5610 July 07’08 low
1.5467 Jun 23’08 low

Resistance Comments
1.5714 Daily 50 ema
1.5842 Jun 09’08 high
1.5947/45 July 11 & 22’08 highs
1.6018 YTD high

Published on  Thu, Jul 24 2008, 07:20 GMT

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